Back to reality: Approaching the effect of violence on agriculture

Abstract

This paper analyzes the impact of an increase in the armed conflict on agricultural production using the case of the Colombian coffee sector. I exploit a natural experiment in the levels of violence due to the unexpected rupture of the peace dialogues between Colombian Government and FARC in 2002. Using data provided by National Federation of Coffee Growers of Colombia, I estimate the Intention to Treat (ITT) using Diff-in-Diff Model. Results suggests that an exogenous increase of the levels of violence induced a reduction of hectares allocated to coffee, on average, -0.06 Ha. Moreover, an average farm, which is 2 ha of coffee, an exogenous increase of the levels of violence induced a reduction of the sowing new coffee until 3.5%. This paper contributes to the literature on the microeconomics costs of conflict in Agricultural Production, providing further information about mechanisms (labor market). Keywords. Land property rights; Coca crops; War on drugs.